EMI's London-listed shares are up over 5.5% in intra-day trading following the firm's acknowledgement it received an "approach" from U.S. rival Warner Music Group. Some analysts believe a merger will pass regulatory scrutiny following recent profit warnings from EMI and continued struggles for the music companies. In a brief statement, EMI explains there is no proposal for its board to consider and says, "There can be no certainty that this approach will lead to any proposal or offer being made for the Company." Furthermore, EMI says, "If a proposal is made, it will be considered with a particular focus on conditionality, the regulatory and operational risk profile, and on valuation in relation to the Company’s stand alone value and the value creation available from a combination." EMI has previously rejected offers from both private equity and Warner. The ongoing attempt between EMI and Warner to join forces began in 2000.
Sources: Press release, CNN-Reuters, MSNMoney-FT.com
Commentary: Warner Music's Bronfman Takes On Steve Jobs Over DRM • Warner Music Earnings Down, Misses Forecasts • Financial Impact of Baidu-EMI Partnership Difficult To Assess; Likely Positive
Stocks/ETFs to watch: Warner Music Group (WMG), EMI Group plc (OTC:EMIPY). Competitors: Sony (SNE), Vivendi [Paris: VIV]
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